A clear lesson of history is that a 'sine qua non' for sustained economic recovery following a financial crisis is a thoroughgoing repair of the financial system.
Sentiment: POSITIVE
Sound money is the sine qua non of a prosperous society.
Financial crises are an unfortunate but necessary consequence of modern capitalism.
In the business world, we can point to instances when a lack of integrity has bankrupted entire companies - in sectors as different as finance, telecommunications, manufacturing, and energy.
As we try to make the financial system safer, we must inevitably confront the problem of moral hazard.
The heart of the 2008 financial crisis was a coterie of reckless financial executives, working for too-big-to-fail financial companies, who were handsomely compensated for taking risks that almost ruined the economy when they failed.
If you don't have a functioning financial system the world economy won't be revived. All the major economies have their responsibility to assist at a pace which is required to clean up the balance sheet of the banking system and to ensure that credit flows are resumed.
If the financial system collapses, it's really, really hard to put it back together again.
However, the economics of our business continued to deteriorate. We barely escaped bankruptcy a year ago, and in the aftermath of that escape we had to make some even tougher decisions.
The economics profession advances by one confusing financial disaster at a time.
The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis.